Posted
by
kdawsonon Tuesday September 22, 2009 @05:29PM
from the on-the-bright-side-the-rent's-free dept.

coondoggie writes "Too many online scammers get away with what amounts to a wrist-slap, but a case if Las Vegas this week seems to be heading the right direction. According to the Federal Trade Commission, a business opportunity scammer has been held in contempt for the second time by a federal court and ordered to turn over the title of his home in Las Vegas or face jail time. The court found that the operator of the scam, Richard Neiswonger, failed to deliver marketable title to his home, in violation of a previous court order entering a $3.2 million judgment against him, the FTC stated. The FTC charged that the defendant deceived consumers with false promises that they could make a six-figure income by selling his 'asset protection services' to those seeking to hide their assets from potential lawsuits or creditors."

It would be the obvious defense. I wonder why his lawyer didn't think of that.

"Tell them my house is just a front and all my assets are in the Caiman Islands ! My scheme works, I'm not a scammer !""As a professional, I suggest you shut the fuck up. Also my fee just went up quite a bit."

why does the judge even need the Title. If a court orders it forfeit, can't they just issue something like a "court's lien" to the county department of deeds... the feds seem to do it all the time with no trouble.

why does the judge even need the Title. If a court orders it forfeit, can't they just issue something like a "court's lien" to the county department of deeds... the feds seem to do it all the time with no trouble.

That's what I find interesting. Delivering marketable title seems to mean that he has to pay off all the liens. That may not even be possible for him given the current state of things.

He could simply sign over his existing "ownership" of the property to the court. There are plenty of real estate deals in which the loans are preserved, but the person paying them changes. I forget right now what that was called though.

However, AFAIK, judges have the power to effectively transfer ownership. So why all thi

Another poster mentioned that perhaps it's an order to get at money "offshore" that the court can't touch. One of the problems with offshore accounts is that even WITH a legal court order they won't turn over money, or even information. This is probably a way to lock him up until he pays up. Like you said, the only way they'll get any money to pay anybody back is if the guy goes and gets it to pay off this house. Otherwise he goes "bankruptcy" on his US assets, and pulls start up money from the bank offshor

If his service actually works, his home in Las Vegas (which is probably underwater anyways) is just the tip of the iceberg, and most of his ill-gotten gains are hiding safely in Jamaica - which is distinctly possible.

Yeah, those major tourist destinations where people go to drop thousands really are a pain to deal with. Heck, California is probably flush with cash anyway though, what with them having one of the largest economies in the world [wikipedia.org].

What caused the problem was Wall Street and the Banks. Speculators had NOTHING to do with it. Don't for a minute keep spreading the lies about how regular people, the speculative investors, caused our current economic crisis. It implies that there is not a group of people who have gotten away with murder, and are continuing to do so at this very moment. Those investors have been destroyed 99/100 times.

What DID cause the real estate bubble and the corresponding crash was.... SECURITIZED MORTGAGES

We're getting a little offtopic here but I'll expound on that by exposing the crooked banlers' modus operandi.

Start with an adjustable rate mortgage. When the next year comes around, particulary when the price of gasoline has jumped from a buck a gallon to over four, stick it to the homeowner and jack up his interest. The poor schmuck is trying valiantly to make his payments but gets behind. Bingo, the bank can r

That sounds better to me too. Punishing these people is a start but the reality is we need to do a better job of educating consumers. As long as there are suckers there will be people trying to scam them.

That sounds better to me too. Punishing these people is a start but the reality is we need to do a better job of educating consumers. As long as there are suckers there will be people trying to scam them.

Hear! Hear! In fact, I have just the cure-for-naivete/stupidity you're looking for... right here and for a limited time only I'm willing to offer you a secret extract derived the the lubricant glands of the rare pythonus imaginarius. This elixir has been known cure even the most obstinately held absurd beliefs, why just the other day it helped cure some poor fool who thought he could solve the problem of confidence men by "educating consumers" - God's honest truth - the poor bastard actually believed that!! Act now and receive, as my gift to you, a one-size fits all societal curative ideology! Don't pass this opportunity up!!

If it was high school curriculum, then people would know by the time that they're 16 that scammers are out to rip them off.If people knew that, then it's not much of a leap of logic to figure out by the time you're 20 that banks, governments and other corporations are out to rip you off, too.

And get the news out in the mainstream press and in the right channels where opportunists will see it (IRC, forums, etc). Would spammers take the risks they do if the penalties were higher and more common?

I hope the government has a plan to build more jails because they will fill up fast with these fools. These guys are really taking advantage of the situation right now with a lot of people out of work.

Well, there has to be a better solution than jail, depending on the seriousness. But, you're right, this problem is getting worse. Just look on Craigslist and job sites. There are more scams than real jobs. Something has to be done to stop it.

What's going to happen? The scammer asshole coughs up his assets to the Government and does any of that money go to reimbursing the victims? I doubt it. The victims would have to file suit against this low life and get what? Nothing because the Feds took it all.

What I tell friends and family and anyone who wants to listen: consider all unsolicited emails as scams. The same for telemarketers - if you're on the DNC list, then those people are breaking the law by calling you which makes them criminals. You don't want to do business with criminals, do you?

Junk mail a lot (too many) of times are crooks too - you know the "checks" that come in the mail for you to deposit and send money via Western Union to others.

Some day, one of these assholes is going to scam the wrong person and they may end up wishing they've gone to jail.

I've been getting calls from 202-495-7152 for about a week now, several times a day, and if I ask them to stop calling they hang up. I stayed on the line to see what it's about and it's one of those, "You won a million dollars, send us $10,000 for shipping insurance" scams.

I've reported them to as many people as I can, and no one cares.

So yeah, scamming is a pretty good way to make some extra cash, since no one cares enough to track them down or arrest them until they amass millions.

Maybe you should say that you are delighted that they have accepted your "call review service" at $X per call plus $Y per minute. [..] In which case you have an address to send them an invoice.

Yeah, that's going to be a raging success (just like the previous thousand times something similar's been suggested on Slashdot.)

They've been running a scam and ripping people off without concern as to whether it's legal. But they're *definitely* going to fork out when some (not-so) smartass basement dweller sends them an invoice for some half-baked quasi-legalistic scheme they thought up.

Some day, one of these assholes is going to scam the wrong person and they may end up wishing they've gone to jail. I suspect anybody smart enough to track down, kidnap, and torture one of these assholes is also smart enough to not fall for the scam in the first place... sigh.

I still get emails from people who scan the resumes on Monster.com and offer people a work-at-home position receiving checks, then wiring the money overseas... best of all, "it is perfectly legal!"

I got something for you. This asshole see, he promised my grandmother something and didn't make good. I'd like you to pay him a visit and discuss it real nice like. Explain to him how heartbroken my grammy is about losing her savings. See what sort of refunds he offers. Oh, take the boys with you, make it a night out on the town. Paint it red.

The FTC has an archive of case materials [ftc.gov]. Looks like a complaint was brought in 1996, and he settled in 1997, which included agreeing to a permanent injunction. The FTC brought another complaint in 2006, got a temporary restraining order, and a finding of contempt of court in 2007. The 2007 filing [ftc.gov] is the one that instituted a $3.2 million fine and ordered Neiswonger to turn over title to a specific residence in Las Vegas as part of paying it.

It's not clear to me if that's his primary residence or a secondary one. Usually primary residences are shielded from civil judgments. If it's a secondary one, this case isn't unusual at all, since ordering a 2nd home to be sold to pay a judgment is common. If it's a primary one, I'm not sure if the rules are different because it's a contempt proceeding. (In theory it seems the rules might also be different for even primary residences purchased with ill-gotten money, but none of the complaints seem to allege that specifically.)

Assuming this guy has been scamming the whole time and didn't just start in the past few years (or didn't stop in the 90s and just start up again), it's pretty sad that it's taken 11 years from the original complaint to get any meaningful actions taken. Though you could argue that's 13 years, and not 11, since apparently he hasn't complied with the court order for 2 years, with no consequences until now.

It depends on what state you're filing in, as federal bankruptcy law explicitly defers that decision to the states. Here in Texas, you can choose between the federally recommended exemptions (which only allows you to keep $20,200 of equity on your home), or Texas's own set of exemptions (which lets you keep any size house, but only up to 10 acres of land in the city or 100 acres of land in the country, and is more restrictive in other categories than the federal expeditions). I'm sure it varies wildly fro

Get all of his property, including anything off-shored (property, money & other stuff) and vehicles (car , boats & airplanes) that this moron has,The most important that they get the off-shored stuff since most criminals now, like companies, are off-shored so they can put these items into tax and legal havens so these people don't have to worry about tax or government garnishing these things.If the US is really smart, they should go after all these criminals so they can recoup lost of tax revenue th

Isn't hiding assets from creditors unlawful? Isn't any "service" designed to assist people in committing unlawful acts also illegal? What is the difference between "You can make big $$$ selling our program to help people hide their assets!" and "You can make big $$$ breaking legs for loansharks whose borrowers don't pay up!" Either way, your business model is asking people to pay you to help them commit crimes. This fails one of the first tests any "business opportunity" should pass: is it legal?

1. A Prenuptual agreement is technically a form of asset protection. Putting assets into some forms of trusts for dependants or descendants is also. In general, when there's a marriage or a child involved, or a business partnership, a second person's rights to privacy may mean a creditor has at best limited rights to know about assets, particularly ones they also can't legally claim. In the ordinary course, there shouldn't be legally shielded assets that a credi

Um, how did his claim count as fraud? He made (at least) 3.2 million selling his "program". So surely others could manage
the claimed "six figures" doing the same thing, no? Thus, no fraud. His system worked, simple as that.

Granted, the end-product may (or may not - He may have said nothing more complex than "sell everything and bury your cash in
the back yard") have violated a law or two, but he didn't actually sell the "asset protection" service, he sold educational material
on how to hide assets. And he didn't really even do that, according to the FTC, he sold lessons on how
to sell educational material on how to hide assets.

Seriously, how many layers of indirection do you have to toss in before it stops counting as a crime?
If I convince you to pay me $20 to tell you where you can find bomb-making instructions, then send you
off to the library after you pay up... Have I committed a crime?

If its a community property state, the FTC will only get half. And if she's anything like my wife, after sharing the place for a few months, the gov't will come crawling back, begging to have Neiswonger take it back.

Civil contempt means that the person who is locked up holds the keys to the jailhouse doors in his or her own hands. Comply and be freed. Stay defiant and stay locked up. If you don't like it, you can appeal.

Civil contempt means that the person who is locked up holds the keys to the jailhouse doors in his or her own hands. Comply and be freed. Stay defiant and stay locked up. If you don't like it, you can appeal.

And if the person does not actually "posses the keys", sucks to be him. good luck proving that you honsetly do not know the password, that the money is really gone, etc.

And if the person does not actually "posses the keys", sucks to be him. good luck proving that you honsetly do not know the password, that the money is really gone, etc.

Proving money is really gone is not too hard: just give full (and I mean full) disclosure of assets and transactions. The courts will have the proof that certain money transactions went your way (that's why they can recover that - one way or another it's proven you got it). It is your responsibility for tax reasons to keep your financial administration for a certain period of time (no idea on the actual period in the USA) and certainly banks will keep records of transactions in and out of your accounts. The

How exactly does that work with, for example, stolen goods? Some poor schmuck robs a bank and drives off with with $5,000,000. Police chase, he goes off a bridge trying to get away. Money floats down the river while the crook swims to shore. Police pick him up some time later in the woods, without a dime on him, and claim he stashed the goods some where in the woods. Judge offers leniency if money is returned.

So, he serves essentially a life sentence as he will not be released until he shows where he s

How exactly does that work with, for example, stolen goods? Some poor schmuck robs a bank and drives off with with $5,000,000. Police chase, he goes off a bridge trying to get away. Money floats down the river while the crook swims to shore. Police pick him up some time later in the woods, without a dime on him, and claim he stashed the goods some where in the woods. Judge offers leniency if money is returned.

The police will be able to verify this story by finding money floating in the river, stuck under tree trunks, witness reports, whatever.

So the judge asks, "Where is the money?" The response? "Lost in a fire." "Scattered over the Amazon." "Under a big 'W'." "Stolen by Jimmy the Nose." "I just don't know, your honor." The crook goes back in the cell for "contempt".

How does one prove lack of knowledge? How do you prove something is truly lost or destroyed?

Many of these things leave traces; and unless the story is completely made up there will be traces - or at least ways to verify it's believable or not. Stolen by or paid to other criminal? Name this guy, police can chase him down. Lost in a fire? Well there will likely be a record of that fire at some fire department. Can be checked.

So, he serves essentially a life sentence as he will not be released until he shows where he stashed the money.

No. You gave away the ending in your opening: "Judge offers leniency if money is returned." Not returning it doesn't turn it into a life sentence, it means you won't get any leniency.

More generically, there's not going to be a contempt situation where you can go to jail indefinitely if the contempt isn't material to the case. IE, whether you return the money or not has no bearing on whether or

The punishment for contempt would still work if it included a jury trial like any other crime - disobey a cop/interfere with an investigation and get locked up for 6 months (for example) after proper criminal proceedings. In the same way, once proven that you disobeyed a valid court order, you would be charged with contempt of court and locked up for 6 months. In some situations, this can encourage more serious crimes. For example, someone ordered to reveal if they had any other assets, could (1. refuse to

or (3. show the court what happened to their income, and that they have given full disclosure of their assets). To be thrown in jail for not disclosing assets means that the court has certain proof that there must be certain undisclosed assets present. E.g. someone has been proven to have received illegal income of say a couple million dollars, but only discloses half a million worth of assets. What happened to the rest?

I can not imagine that there is a way for the court to put someone in jail without havi

exactly, the idea of contempt is that you are holding up the court from making fair judgment.... so the court will wait for you to do your duty... you'll have nothing better to do.

That's one other thing about US courts is that it's your Legal DUTY to provide the information the court needs. While you can't testify against yourself in CRIMINAL cases, that's exceedingly narrow in that testifying and something "very bad" happening because of it isn't really the court's problem. In this case he was ordered to p

Contempt of court is the only thing that can legally get you sent to jail indefinitely without a jury trial in the US.

No, in fact, the (former) president of the United States stated that if you are suspected of terrorism, you can be held without charge indefinitely, without access to a lawyer, and without any right to challenge the fact that you were so designated (or even to see any of the evidence used to designate you a terrorist.)

For example, Jose Padilla was a U.S. Citizen, picked up on U.S. territory, and put into solitary confinement without being allowed to see talk to a lawyer and without any charges against him. On September 9, 2005, a three-judge panel of the Fourth Circuit ruled that President Bush indeed has the authority to detain Padilla without charges, in an opinion written by judge J. Michael Luttig.

So, no, contempt of court is not the only thing that can legally get you sent to jail indefinitely without a jury trial in the US.

Ummm... that'd defeat the whole purpose, since charges of treason and the implementation
of capital punishment are fraught with all kinds of Contitutional perils. This is especially
so when they are carried out in haste, so no thank-you.

FWIW, my XXIX would be to abolish capital punishment. I'm not soft on crime though.
If you committ armed robbery, assault with a deadly weapon, rape or murder the ammendment
should also state you get life with no chance of parole, and it goes without saying that
there's a

For example, Jose Padilla was a U.S. Citizen, picked up on U.S. territory, and put into solitary confinement without being allowed to see talk to a lawyer and without any charges against him.

But... but he was a bad guy! He kicked his dog, peed on the American flag, tore the tag off of his mattress, returned his DVDs without rewinding them, did not have his pet spayed or neutered, only looked one way before crossing, and was personally at the controls of both planes that crashed into the World Trade Center.

Well, that's the interesting thing of it. You give one president arbitrary powers, because you trust him to not misuse them, and, you know, you discover that the next president takes those powers, too. And the next. So you have to trust all of them not to misuse them.

Well, it's all perfectly legal. All that stuff about being innocent until proven guilty, constitutional rights-- that's obsolete. The courts said so-- if somebody says the word "terrorism," that word erases any of your so-called "rights".

The key word here is "legal". Just because the President says something does not make it legal. Nor does the opinion of three payed for judges make it legal. The Second Circuit made the correct and lawful interpretation on December 18, 2003.

It's too bad that the decision you quote was appealed to the Supreme Court, who ruled that the Second Circuit Court did not have jurisdiction, which means that their decision has no legal standing. When the case was re-filed, and the decision appealed to United States Court of Appeals for the Fourth Circuit in Richmond, the court ruled [wikipedia.org] that the president has the right to detail people without trial for indefinite periods of time. That ruling remains the current legal precedent on the case. Note that iit

I am aware of that ruling. I am stating that that ruling itself is illegal and in clear contradiction with the constitution. If there is any semblance of law and justice left in America, it will be reversed.